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Rogers Communication Sued By Canadian Government Over Chatr Ad Campaign

TORONTO -- Cable and mobile giant Rogers Communications has been hit with a lawsuit from the federal government over an allegedly misleading advertising campaign for its discount talk-and-text Chatr brand.

Following a two-month investigation, the federal Competition Bureau filed legal action in the Ontario Superior Court of Justice that alleges Rogers wrongly marketed Chatr as more reliable and featuring fewer dropped calls than new market entrants.

“The Bureau's investigation led the Bureau to conclude that there is no discernible difference in dropped call rates between Rogers/Chatr and new entrants,” the federal government agency said ahead of the court showdown.

It’s the latest sign that competition among Canadian cable and phone giants has become cutthroat as they look to control the country’s expanding media market.

The Competition Bureau asked the Ontario court to order Rogers to immediately stop its advertising campaign for Chatr, pay a $10 million penalty, reimburse affected customers and issue a public notice explaining the court order against the mobile phone giant.

Melanie Aitken, commissioner of competition at the Competition Bureau, said her agency takes misleading advertising seriously.

"Consumers deserve accurate information when making purchasing decisions and need to have confidence they are not being misled by false advertising campaigns,” she said in a statement.

The legal action against Rogers follows the federal government in 2008 opening up the domestic mobile phone market to new competition for incumbent players like Rogers, BCE and Telus Corp.

The Ontario court action underlines how Ottawa is looking to help new market entrants secure a foothold in the Canadian market, as Rogers, BCE and Telus look to protect their market share.